11 March 2010

Canada: A good place to get ahead

The OECD has released its latest Going for Growth report and it has some good things to say about Canada. For example, we have one of the highest social mobilities in the developed world. According to the report, "Mobility in earnings across pairs of fathers and sons is particularly low in France, Italy, the United Kingdom and the United States, while mobility is higher in the Nordic countries, Australia and Canada."

In Canada, less than 20 per cent of the economic advantage that high-earning fathers have over low-earning fathers is passed on to their sons. In Britain, which showed the strongest link between an individual's and their parents' earnings, 50 per cent of the economic advantage is passed on. In other words, like father, like son is much less likely in this country than in Britain, or, for that matter, in the U.S.

Not surprisingly, the study found that "Education is a key driver of intergenerational persistence in wages." Parents' social and economic background has a considerable influence on whether or not young people go on to higher education. The influence of background is particularly strong in Belgium, France and the United States, and relatively low in some Nordic countries, as well as in Canada and Korea. The Canadian education system seems to be doing a much better job of boosting poor kids' prospects than these other countries' systems.

The surprise in all this is not that social mobility is relatively high in Canada, or that it is much higher here than in Britain, but that it is so low in the United States. So much for Horatio Alger.

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